Mark Carney, governor of the Bank of England, said at the formal launch of the report: ‘Jayne-Anne Gadhia’s report is long overdue. For too long the representation of women in middle and senior tiers of management has lagged that in other leading sectors. For too long, results have fallen short of good intentions. And for too long the financial sector has suffered the economic consequences of this inequality while society has borne the broader costs. Greater diversity – in all its forms, cognitive, gender, background, ethnicity, religion – can help transform the financial sector.’ (Read his full speech here)

The review’s authors commissioned New Financial to put together a dataset looking at female representation on boards and executive committees across the broad spectrum covered by UK financial services firms regulated by the PRA and the FCA. Our data defines the starting point, and unsurprisingly, the numbers aren’t great. We looked at 200 firms, and found on average female representation was 23% on boards and 14% on excos.

The review’s final recommendations seem simple enough. They are:

1) Companies should set internal diversity targets and publicly report on progress to reach them

2) An executive committee member must be held accountable for improving gender diversity through the business

3) Bonuses should be tied to achieving those diversity targets

But New Financial is acutely aware of the challenges that these recommendations pose. Throughout our programme of events and research on diversity, we have advocated greater transparency on diversity data as a means to identify problems, stimulate discussion and drive change (read our report on diversity disclosure).

While some firms are leading the charge on disclosing targets and narrative reporting of how they are setting about achieving those targets, the majority are at the early stages of working out why diversity is important to their business, what diversity data they should be recording, how it should be analysed and how it should be acted upon.

The Gadhia review’s recommendations may be voluntary, but they are a provocative call to action. New Financial will continue our work to encourage the financial services industry to follow best practice and share ideas cross-sector. We will be publishing our own analysis of the UK data, and we are working on a new report which will include industry feedback on the Gadhia review’s findings, as well as further discussion of the reporting requirements laid out in the review.

New Financial firmly believes that diversity in its broadest sense is not only an essential part of running a sustainable business but a fundamental part of addressing cultural change in capital markets. We hope the Gadhia review acts as a powerful catalyst for financial services firms – just as the Davies review of women on boards proved to be – to prompt the industry to make a permanent shift to a more diverse and sustainable future.